Comments on Links for 11-23-2012TypePad2012-11-23T05:51:48ZMark Thomahttp://economistsview.typepad.com/economistsview/tag:typepad.com,2003:http://economistsview.typepad.com/economistsview/2012/11/links-for-11-23-2012/comments/atom.xml/Fred C. Dobbs commented on 'Links for 11-23-2012'tag:typepad.com,2003:6a00d83451b33869e2017ee5920f42970d2012-11-24T15:30:40Z2012-11-24T15:30:40ZFred C. DobbsEgypt's Morsi assumes sweeping powers, branded new pharoah http://shar.es/6aCx2 CAIRO (AFP) - Egypt's Islamist President Mohamed Morsi assumed sweeping powers...<p>Egypt&#39;s Morsi assumes sweeping powers, <br />
branded new pharoah <a href="http://shar.es/6aCx2" rel="nofollow">http://shar.es/6aCx2</a></p>
<p>CAIRO (AFP) - Egypt&#39;s Islamist President Mohamed Morsi assumed sweeping powers on Thursday, drawing criticism he was seeking to be a &quot;new pharoah&quot; and raising questions about the gains of last year&#39;s uprising to oust Hosni Mubarak.<br />
<br />
The move is a blow to the pro-democracy movement that toppled the long-time president, himself derided by many as a pharoah, and raises concerns that Islamists will be further ensconced in power. ...<br />
</p>Fred C. Dobbs commented on 'Links for 11-23-2012'tag:typepad.com,2003:6a00d83451b33869e2017c33ed41a3970b2012-11-24T12:11:05Z2012-11-24T12:11:05ZFred C. DobbsI am reminded that my best h/s math teacher got his degree on a four-year scholarship to Union College from...<p>I am reminded that my best h/s math teacher<br />
got his degree on a four-year scholarship<br />
to Union College from Union Carbide<br />
(presumably NOT so he could become<br />
a dedicated teacher.)</p>
<p>In a country as &#39;corporate&#39; as ours is,<br />
there should be more of this (arguably).</p>Fred C. Dobbs commented on 'Links for 11-23-2012'tag:typepad.com,2003:6a00d83451b33869e2017c33ed3723970b2012-11-24T12:04:11Z2012-11-24T12:04:11ZFred C. DobbsHopefully, go after some heavy-duty gun control also. Promises on Gun Control http://nyti.ms/TkrK05 NYT - November 23, 2012 - editorial...<p>Hopefully, go after some<br />
heavy-duty gun control also.</p>
<p>Promises on Gun Control <a href="http://nyti.ms/TkrK05" rel="nofollow">http://nyti.ms/TkrK05</a><br />
NYT - November 23, 2012 - editorial</p>
<p>NYT: ... in his first term, Mr. Obama did nothing to cross the gun lobby, and he actually signed legislation allowing loaded firearms to be carried in national parks. Let’s hope Mr. Obama shows more courage on guns in his second term. He said during the debate that he would see “if we can get an assault weapons ban reintroduced” and that we need to look at “other sources of the violence,” like “cheap handguns.” Now it’s time to follow through on those promises. ...</p>
<p>(Now) Mr. Obama is free of the pressures of campaigning — and free to lead the nation toward sensible laws that can help reduce the flood of guns and related homicides. ...</p>cm commented on 'Links for 11-23-2012'tag:typepad.com,2003:6a00d83451b33869e2017ee58f45b6970d2012-11-24T07:51:36Z2012-11-24T07:51:36ZcmThe problem is that for this kind of stuff, the supply side "market approach" doesn't work to the advantage of...<p>The problem is that for this kind of stuff, the supply side &quot;market approach&quot; doesn&#39;t work to the advantage of employers. Somehow people are supposed to shell out serious money and commit several years of time (opportunity cost) to acquire whatever skills may be demanded a number of years down the line, so that companies can then hire &quot;from the market&quot;.</p>
<p>If that is not implausible enough, it is only employers what skill/experience will actually be needed. Also the more advanced business gets (and we are told it is), more and more depends on proprietary in-house knowledge and practices.</p>
<p>The logical conclusion is for employers to train up &quot;potentials&quot; and generally develop their own workforce. Of course, then you need some mechanism to bind workers you invested in to the company. Either some kind of bondage contract, or a company pension.</p>
<p>Actually, that&#39;s how it worked in the old days before union busting and hire/fire.<br />
</p>anne commented on 'Links for 11-23-2012'tag:typepad.com,2003:6a00d83451b33869e2017c33e91065970b2012-11-24T01:07:49Z2012-11-24T01:07:49ZanneI suppose this means you can get to fly while you are flying, but I am not as clever as...<p>I suppose this means you can get to fly while you are flying, but I am not as clever as Julio.</p>anne commented on 'Links for 11-23-2012'tag:typepad.com,2003:6a00d83451b33869e2017c33e90bf8970b2012-11-24T01:06:02Z2012-11-24T01:06:02Zannehttp://www.nytimes.com/2012/11/24/business/installation-problems-seen-in-american-airlines-loose-seats.html November 23, 2012 Cost-Cutting Cited in Loose Plane Seats [ Among the best explanations ever. ]<p><a href="http://www.nytimes.com/2012/11/24/business/installation-problems-seen-in-american-airlines-loose-seats.html" rel="nofollow">http://www.nytimes.com/2012/11/24/business/installation-problems-seen-in-american-airlines-loose-seats.html</a></p>
<p>November 23, 2012</p>
<p>Cost-Cutting Cited in Loose Plane Seats</p>
<p>[ Among the best explanations ever. ]</p>im1dc commented on 'Links for 11-23-2012'tag:typepad.com,2003:6a00d83451b33869e2017d3e171a83970c2012-11-23T23:31:40Z2012-11-23T23:31:40Zim1dcFor the uninitiated that read the above and think it is not related to Economics allow me to educate you...<p>For the uninitiated that read the above and think it is not related to Economics allow me to educate you to my Nobelish Econ Equivalence theorem:</p>
<p>Economics = Politics </p>
<p>and </p>
<p>Politics = Economics</p>im1dc commented on 'Links for 11-23-2012'tag:typepad.com,2003:6a00d83451b33869e2017d3e1711b1970c2012-11-23T23:24:51Z2012-11-23T23:24:51Zim1dc17 days since the 2012 Presidential Election and the two Great White Hopes of the Republican Party are positioned for...<p>17 days since the 2012 Presidential Election and the two Great White Hopes of the Republican Party are positioned for nascent 2016 presidential runs, with an weary eye cast on Latinos, Rubio and Cruz, as potential VP running mates...women need not apply...they haven&#39;t learned a thing!</p>
<p><a href="http://thehill.com/" rel="nofollow">http://thehill.com/</a></p>
<p>&quot;NJ Gov. Christie has tightrope to walk for 2016 presidential bid&quot;</p>
<p>Justin Sink ... 11/23/12 ...02:00 PM ET</p>
<p>&quot;His favorability has soared post-Sandy, but many conservative Republicans see his embrace of President Obama as a betrayal...&quot; </p>
<p>=================================================<br />
&quot;Report: Jeb Bush supporters say he is considering 2016 presidential run&quot;</p>
<p>Alexandra Jaffe ... 11/23/12... 11:45 AM ET</p>
<p>&quot;A report cites friends who say the former governor is &quot;weighing financial and family considerations&quot; for a future run...&quot;</p>im1dc commented on 'Links for 11-23-2012'tag:typepad.com,2003:6a00d83451b33869e2017ee58bb325970d2012-11-23T22:42:51Z2012-11-23T22:42:51Zim1dcGrover Norquist is going down fast and easy http://www.politico.com/news/stories/1112/84176.html "Saxby Chambliss takes aim at Grover Norquist" By KEVIN ROBILLARD |...<p>Grover Norquist is going down fast and easy</p>
<p><a href="http://www.politico.com/news/stories/1112/84176.html" rel="nofollow">http://www.politico.com/news/stories/1112/84176.html</a></p>
<p>&quot;Saxby Chambliss takes aim at Grover Norquist&quot;</p>
<p>By KEVIN ROBILLARD | 11/23/12 8:39 AM EST</p>
<p>&quot;Sen. Saxby Chambliss took aim at Americans for Tax Reform head Grover Norquist on Wednesday, telling a local television station he’s not worried about a potential primary challenge if he votes to raise taxes.</p>
<p>“I care more about my country than I do about a 20-year-old pledge,” said Chambliss, who signed Norquist’s “Taxpayer Protection Pledge” when he first ran for Senate. “If we do it his way, then we’ll continue in debt, and I just have a disagreement with him about that.”...<br />
</p>im1dc commented on 'Links for 11-23-2012'tag:typepad.com,2003:6a00d83451b33869e2017ee58bad5c970d2012-11-23T22:38:06Z2012-11-23T22:38:06Zim1dcI've also heard from several sources, real people in real job who are in a position to know, that machine...<p>I&#39;ve also heard from several sources, real people in real job who are in a position to know, that machine shops and manufacturers with their own machine shops were not hiring or expanding first during the Bush/Cheney/Republican caused Grand Recession and second b/c of uncertainty due to President Obama&#39;s policies and the uncertainty of Health Care Reform. </p>
<p>But now they have to expand and will do so cautiously or lose to others and if there is one thing I know in my heart it is that greed gland runs the show in every American, of whatever heritage, entrepreneur.</p>im1dc commented on 'Links for 11-23-2012'tag:typepad.com,2003:6a00d83451b33869e2017c33e813d8970b2012-11-23T22:33:37Z2012-11-23T22:33:37Zim1dc"It is unlikely that Dems will win in 2016, so they may just as well go all out on this."...<p>&quot;It is unlikely that Dems will win<br />
in 2016, so they may just as well<br />
go all out on this.&quot;</p>
<p>That&#39;s better.</p>Fred C. Dobbs commented on 'Links for 11-23-2012'tag:typepad.com,2003:6a00d83451b33869e2017c33e8130b970b2012-11-23T22:33:06Z2012-11-23T22:33:06ZFred C. Dobbs(Said pigeon was actually found 30 years ago & they are just getting around to having the note decoded. Hopefully,...<p>(Said pigeon was actually found 30<br />
years ago &amp; they are just getting<br />
around to having the note decoded.<br />
Hopefully, it&#39;s nothing too urgent.)</p>Fred C. Dobbs commented on 'Links for 11-23-2012'tag:typepad.com,2003:6a00d83451b33869e2017c33e810b0970b2012-11-23T22:31:28Z2012-11-23T22:31:28ZFred C. Dobbs(Seriously, Mubarak became quite a serious tyrant, and we/they can only hope Morsi doesn't follow in his footsteps.)<p>(Seriously, Mubarak became quite a serious<br />
tyrant, and we/they can only hope Morsi<br />
doesn&#39;t follow in his footsteps.)</p>Fred C. Dobbs commented on 'Links for 11-23-2012'tag:typepad.com,2003:6a00d83451b33869e2017d3e160a9b970c2012-11-23T20:30:29Z2012-11-23T20:30:29ZFred C. DobbsWorkers Must Get a Bigger Slice of the Pie http://nyti.ms/Y68aaG NYT - November 22, 2012 - SIMON TILFORD - London...<p>Workers Must Get a Bigger Slice of the Pie <a href="http://nyti.ms/Y68aaG" rel="nofollow">http://nyti.ms/Y68aaG</a><br />
NYT - November 22, 2012 - SIMON TILFORD - London </p>
<p>Economic growth in Europe depends on a recovery in household consumption. And that, in turn, requires a rethinking of the balance between capital and labor. </p>
<p>Over the last 30 years, wage growth has lagged behind productivity across the industrialized world, leading to a steep fall in wages, salaries and other employee benefits as a proportion of G.D.P. </p>
<p>Simultaneously, there has been a big rise in inequality as the benefits of economic growth have accrued to those at the top of the income scale, as well as a steady increase in corporate income and profits. These trends have gone hand-in-hand with a steady decline in business investment. </p>
<p>Europe’s strategy for dealing with the euro zone crisis has exacerbated these trends and is therefore a further obstacle to economic recovery. European countries are relying on two things to boost investment and hence employment: </p>
<p>First, they are trying to lower labor costs, make their business environments more attractive by switching the burden of taxation from the corporate sector to the consumer, pushing through labor reforms aimed at reducing workers’ bargaining power and curtailing social rights and transfers. Second, they are attempting to boost business confidence by consolidating public finances. </p>
<p>Such a strategy might make sense for individual countries, so long as they can rely on exports, but not for the European economy as a whole. The strategy promises to further aggravate Europe’s core problem — a structural shortage of demand — by bringing about a further decline of labor income and a further rise in inequality. </p>
<p>There is no doubting the need for reforms aimed at increasing competition and opening the way for the adoption of new technologies. But governments need to combine market-led reforms with measures aimed at preventing a further decline in labor’s share of the pie. </p>
<p>With households now highly indebted across the industrialized world, a sustained recovery in private consumption will require a rise in the share of national incomes accounted for by wages and salaries. ...</p>
<p>(Simon Tilford is chief economist at the <br />
Center for European Reform in London. )</p>Fred C. Dobbs commented on 'Links for 11-23-2012'tag:typepad.com,2003:6a00d83451b33869e2017d3e15e38d970c2012-11-23T20:00:44Z2012-11-23T20:00:44ZFred C. Dobbs(Looks like somebody wants a pay increase.) 'Upon stepping down as Prime Minister Gordon Brown nobly took a pay cut...<p>(Looks like somebody wants a pay increase.)</p>
<p>&#39;Upon stepping down as Prime Minister Gordon Brown nobly took a pay cut for Cameron, with PM pay going from £194k to £150k. Having set up his pre election pledge to cut ministerial salaries by 5% Cameron was then forced to take his own salary down to a humble £142k.&#39; - Huffington Post</p>Fred C. Dobbs commented on 'Links for 11-23-2012'tag:typepad.com,2003:6a00d83451b33869e2017ee58ab926970d2012-11-23T19:53:42Z2012-11-23T19:53:42ZFred C. Dobbs(Not to worry. Strictly temporary. No doubt Morsi's predecessor Mubarak did something similar.) NYT: Thursday’s decree frees Mr. Morsi, his...<p>(Not to worry. Strictly temporary. No doubt Morsi&#39;s predecessor Mubarak did something <br />
similar.)</p>
<p>NYT: Thursday’s decree frees Mr. Morsi, his decrees and the constitutional assembly from judicial oversight as well. </p>
<p>In a television interview, Mr. Morsi’s spokesman, Yasser Ali, stressed that the expanded powers would last only until the ratification of a new constitution in a few months, calling the decree “an attempt to end the transitional period as soon as possible.” </p>
<p>“Going around in a vicious circle in a transitional period has to end,” he said, apparently referring to the deadlocked constitutional assembly. In some respects, Mr. Morsi’s decree fulfills opposition demands. Secular representatives in the constitutional assembly had walked out in part over their accusation that the Islamists were unfairly rushing the work. ...</p>Fred C. Dobbs commented on 'Links for 11-23-2012'tag:typepad.com,2003:6a00d83451b33869e2017ee58ab110970d2012-11-23T19:47:41Z2012-11-23T19:47:41ZFred C. DobbsCollapse of Budget Talks Deals New Setback to European Union http://nyti.ms/UX6GcH NYT - November 23, 2012 - JAMES KANTER and...<p>Collapse of Budget Talks Deals New Setback <br />
to European Union <a href="http://nyti.ms/UX6GcH" rel="nofollow">http://nyti.ms/UX6GcH</a><br />
NYT - November 23, 2012 - JAMES KANTER and ANDREW HIGGINS<br />
<br />
BRUSSELS — A summit meeting of European leaders collapsed Friday amid bitter discord over a new budget for the European Union, delivering a further blow to a 27-nation grouping already struggling to contain a debt crisis, social discontent fueled by rising unemployment, and doubts about the long-term viability of the euro currency. </p>
<p>Leaders abandoned efforts to set the shape of a trillion-euro long-term budget and called for a new round of talks early next year to try to reach a deal. </p>
<p>Prime Minister David Cameron of Britain, who along with the leaders of the Netherlands, Sweden and several other countries had pushed hard for deep cuts, blasted proposals that left spending on the union’s administrative machinery intact. </p>
<p>This, he said at a news conference, showed that “Brussels continues to exist as if in a parallel universe,” referring to the headquarters for the European Union, which employs about 33,000 people in the European Commission, the union’s main administrative arm. </p>
<p>Mr. Cameron complained that “more than 200 commission staff earn more than I do.” </p>
<p>The refusal to trim bureaucratic costs, which amount to about 6% of total spending, is “insulting to European taxpayers” as many governments are slashing spending, Mr. Cameron said. ...<br />
</p>anne commented on 'Links for 11-23-2012'tag:typepad.com,2003:6a00d83451b33869e2017ee58a8156970d2012-11-23T19:14:57Z2012-11-23T19:14:57Zannehttp://www.nytimes.com/2012/11/24/world/middleeast/amid-protest-egypts-leader-defends-his-new-powers.html November 23, 2012 Clashes Break Out After Morsi Seizes New Power in Egypt By DAVID D. KIRKPATRICK, KAREEM FAHIM,...<p><a href="http://www.nytimes.com/2012/11/24/world/middleeast/amid-protest-egypts-leader-defends-his-new-powers.html" rel="nofollow">http://www.nytimes.com/2012/11/24/world/middleeast/amid-protest-egypts-leader-defends-his-new-powers.html</a></p>
<p>November 23, 2012</p>
<p>Clashes Break Out After Morsi Seizes New Power in Egypt<br />
By DAVID D. KIRKPATRICK, KAREEM FAHIM, and ALAN COWELL </p>
<p>Protesters were said to have set fire to the offices of President Mohamed Morsi in several cities on Friday, as fighting broke out between his supporters and opponents. </p>
<p>[ David Petraeus seems to have run an inept intelligence service so far as the Middle East is concerned, which is tragic but no surprise. ]</p>anne commented on 'Links for 11-23-2012'tag:typepad.com,2003:6a00d83451b33869e2017ee58a7e03970d2012-11-23T19:12:41Z2012-11-23T19:12:41ZanneThough we cannot know for sure, I feel sure that President Morsi of Egypt used the cover provided by President...<p>Though we cannot know for sure, I feel sure that President Morsi of Egypt used the cover provided by President Obama in agreeing to push for a ceasefire in Gaza to simply take authoritarian powers over Egypt. Morsi had already moved haltingly in this direction after being elected President, now the move continues in a pronounced way.</p>
<p>I am astonished at how poor and self-defeating American intelligence on the Middle East is, just astonished and dismayed.</p>Fred C. Dobbs commented on 'Links for 11-23-2012'tag:typepad.com,2003:6a00d83451b33869e2017d3e154154970c2012-11-23T18:06:06Z2012-11-23T18:06:06ZFred C. Dobbs+++ Breaking News +++ British Boffins Baffled +++ Code Found on Pigeon Baffles British Cryptographers http://nyti.ms/10F76JK NYT - November 23,...<p>+++ Breaking News +++ British Boffins Baffled +++</p>
<p>Code Found on Pigeon Baffles <br />
British Cryptographers <a href="http://nyti.ms/10F76JK" rel="nofollow">http://nyti.ms/10F76JK</a><br />
NYT - November 23, 2012 - ALAN COWELL<br />
<br />
They have eavesdropped on the enemy for decades, tracking messages from Hitler’s high command and the Soviet K.G.B. and on to the murky, modern world of satellites and cyberspace. But a lowly and yet mysterious carrier pigeon may have them baffled. </p>
<p>Britain’s code-breakers acknowledged on Friday that an encrypted handwritten message from World War II, found on the leg of a long-dead carrier pigeon in a household chimney in southern England, has thwarted all their efforts to decode it since it was sent to them last month. </p>
<p>As the bird’s story made headlines, pigeon specialists said they believed it may have been flying home from British units in France at around the time of the D-Day Normandy landings in 1944 when it somehow expired in the chimney at the 17th-century home where it was found in the village of Bletchingley, south of London. </p>
<p>After sustained pressure from pigeon-fanciers, the Britain’s GCHQ code-breaking and communications interception unit in Gloucestershire agreed to try to crack the code. But on Friday the secretive organization, whose initials stand for Government Communications Headquarters, acknowledged that it had been unable to do so. </p>
<p>“The sorts of code that were constructed during operations were designed only to be able to be read by the senders and the recipients,” a historian at GCHQ told the British Broadcasting Corporation. </p>
<p>“Unless we get rather more idea than we have about who sent this message and who it was sent to, we are not going to be able to find out what the underlying code was,” said the historian, who was identified only as Tony under GCHQ’s secrecy protocols. ...<br />
</p>Fred C. Dobbs commented on 'Links for 11-23-2012'tag:typepad.com,2003:6a00d83451b33869e2017ee589fe3d970d2012-11-23T17:40:03Z2012-11-23T17:40:03ZFred C. DobbsUpper-Income Consumers Report Less Spending http://nyti.ms/XDPSyD NYT - November 21, 2012 - CATHERINE RAMPELL Upper-income Americans may already be responding...<p>Upper-Income Consumers Report Less Spending <a href="http://nyti.ms/XDPSyD" rel="nofollow">http://nyti.ms/XDPSyD</a><br />
NYT - November 21, 2012 - CATHERINE RAMPELL </p>
<p>Upper-income Americans may already be responding to the higher tax rates scheduled to kick in at the end of this year by curbing their spending, according to new data from Gallup.</p>
<p>---</p>
<p>Gallup - Dennis Jacobe - Upper-Income <br />
Spending Plummets as Higher Taxes Loom <a href="http://behavioraleconomy.gallup.com/2012/11/upper-income-spending-plummets-as.html" rel="nofollow">http://behavioraleconomy.gallup.com/2012/11/upper-income-spending-plummets-as.html</a></p>Winslow R. commented on 'Links for 11-23-2012'tag:typepad.com,2003:6a00d83451b33869e2017d3e15043a970c2012-11-23T17:20:38Z2012-11-23T17:20:38ZWinslow R.In terms of real estate's popularity, voxeu never mentioned leverage and loans. Real estate is of the few asset classes...<p>In terms of real estate&#39;s popularity, voxeu never mentioned leverage and loans.</p>
<p>Real estate is of the few asset classes the masses can leverage like a banker or even a shadow banker. With 3% down, or 33x leverage ratio, the masses are near hedge fund kings.<br />
</p>Fred C. Dobbs commented on 'Links for 11-23-2012'tag:typepad.com,2003:6a00d83451b33869e2017ee589ab53970d2012-11-23T16:37:15Z2012-11-23T16:37:15ZFred C. DobbsI think you're wrong about that. However, more revenue is necessary, and Congress had better see to it that this...<p>I think you&#39;re wrong about that.</p>
<p>However, more revenue is necessary,<br />
and Congress had better see to it<br />
that this happens.</p>
<p>It is unlikely that Dems will win<br />
in 2016, so they may just as well<br />
go all out on this.</p>Fred C. Dobbs commented on 'Links for 11-23-2012'tag:typepad.com,2003:6a00d83451b33869e2017c33e60cd9970b2012-11-23T16:32:20Z2012-11-23T16:32:20ZFred C. DobbsHere's hoping you're right. BUT, such jobs can still be off-shored, where McJobs can't be.<p>Here&#39;s hoping you&#39;re right.</p>
<p>BUT, such jobs can still be<br />
off-shored, where McJobs can&#39;t be.</p>Mark A. Sadowski commented on 'Links for 11-23-2012'tag:typepad.com,2003:6a00d83451b33869e2017c33e60c4a970b2012-11-23T16:32:01Z2012-11-23T16:32:01ZMark A. Sadowskihttp://www.themoneyillusion.com/?p=17786 The NYT misquotes Ben Bernanke By Scott Sumner Yesterday I did a post pointing to a NYT report on...<p><a href="http://www.themoneyillusion.com/?p=17786" rel="nofollow">http://www.themoneyillusion.com/?p=17786</a></p>
<p>The NYT misquotes Ben Bernanke<br />
By Scott Sumner</p>
<p>Yesterday I did a post pointing to a NYT report on a seemingly inexplicable comment by Ben Bernanke:</p>
<p><a href="http://www.nytimes.com/2012/11/21/business/economy/bernanke-urges-action-on-fiscal-accord.html" rel="nofollow">http://www.nytimes.com/2012/11/21/business/economy/bernanke-urges-action-on-fiscal-accord.html</a><br />
<br />
&quot;Mr. Bernanke was also asked why the Fed does not lower or eliminate the interest rate — already at 0.25 percent — that it pays banks for excess reserves kept at the central bank to encourage more lending.<br />
<br />
He said that Fed officials had not ruled out that idea but that so far it appeared the benefits would be very small and that there were concerns that eliminating the interest takes away a tool used to control broader interest rates.&quot;<br />
<br />
Bonnie sent me the actual link, and it turns out that Bernanke said nothing of the sort. </p>
<p><a href="http://www.c-span.org/Events/Ben-Bernanke-Addresses-Economic-Club-of-New-York/10737435976-1/" rel="nofollow">http://www.c-span.org/Events/Ben-Bernanke-Addresses-Economic-Club-of-New-York/10737435976-1/</a></p>
<p>But what he did say is equally mysterious. At one point (just after 40:00) he argues that cutting the IOR rate from 0.25% to zero would depress short term rates by only 8 or 9 basis points. And the implication was that this meant it would provide very little boost to spending. But let’s take that argument one step further. Suppose short-term rates did not fall at all, and T-bill yields stayed at 8 basis points. Would the stimulus be even less? If you were a banker, how would a reduction of IOR from 0.25% to zero impact your demand for excess reserves, if the closest alternative investments paid 0.08%? Wouldn’t your demand for ERs fall?<br />
<br />
The problem with Keynesians is that they view monetary policy through the lens of short-term interest rates, whereas it is actually all about the supply and demand for the medium of account (the base.) That’s why Keynesians screwed up in late 2008, when they failed to loudly scream for easier money (when us MMs were doing so.) This is not to say that lowering the IOR would work miracles. As always it depends on how it affected the future path of policy. But if it failed, it would certainly not fail for the reason given by Bernanke.<br />
<br />
Commenter extraordinaire Saturos sent me the following:<br />
<br />
&quot;Bernanke says that CPI inflation has averaged 2% over the past 4 years, is that right?&quot;<br />
<br />
Let’s assume that Saturos did not misquote Bernanke as the NYT did. (I’m way too busy to listen to the entire interview.) In that case Bernanke is wrong. His favorite consumer price inflation index is the PCE, and this link shows consumer prices rising at a 1.37% rate over the past 4 years. Oddly the Fed delivered inflation rates above 2% when unemployment was low around 2006-08, and has run sub-2% inflation rates during the recent period of very high unemployment. Of course their dual mandate calls for exactly the opposite. How can we get the Fed to end this procyclical monetary policy regime?<br />
<br />
Answer: NGDPLT...&quot;</p>im1dc commented on 'Links for 11-23-2012'tag:typepad.com,2003:6a00d83451b33869e2017ee589701c970d2012-11-23T15:54:07Z2012-11-23T15:54:07Zim1dcYou are as confused as those "Congressional negotiators". The DEMs have nothing to lose that they won't lose anyway by...<p>You are as confused as those &quot;Congressional negotiators&quot;. The DEMs have nothing to lose that they won&#39;t lose anyway by not raising rates.</p>
<p>Get it now?</p>im1dc commented on 'Links for 11-23-2012'tag:typepad.com,2003:6a00d83451b33869e2017d3e148f99970c2012-11-23T15:52:55Z2012-11-23T15:52:55Zim1dcI have seen articles these past 18 months that tell a different tale, they say these new age CAM/CAD machinists...<p>I have seen articles these past 18 months that tell a different tale, they say these new age CAM/CAD machinists start at $70,000 first year and can easily earn 6 figures a year with OT, plus benefits. </p>
<p>Those high paid skilled jobs go begging according to what I&#39;ve read.</p>Fred C. Dobbs commented on 'Links for 11-23-2012'tag:typepad.com,2003:6a00d83451b33869e2017ee5895bfe970d2012-11-23T15:37:15Z2012-11-23T15:37:15ZFred C. DobbsTo the extent that Democrats have nothing to lose (other than elections in 2014 or 2016) because Obama won't be...<p>To the extent that Democrats have nothing<br />
to lose (other than elections in 2014 or<br />
2016) because Obama won&#39;t be running<br />
again, you are exactly right, as<br />
long as wealthy Dems don&#39;t mind<br />
another Wall Street crash.</p>im1dc commented on 'Links for 11-23-2012'tag:typepad.com,2003:6a00d83451b33869e2017ee58951e4970d2012-11-23T15:29:44Z2012-11-23T15:29:44Zim1dc"WASHINGTON — Congressional negotiators, trying to avert a fiscal crisis in January, are examining ideas that would allow effective tax...<p>&quot;WASHINGTON — Congressional negotiators, trying to avert a fiscal crisis in January, are examining ideas that would allow effective tax rates to rise for the wealthy without technically raising the top tax rate of 35%...&quot;</p>
<p>If this is true then those &quot;Congressional negotiators&quot; ought to be fired post haste.</p>
<p>DEMs need to stand pat. The deal is already done, signed, sealed, and delivered on November 6th, President Obama won and the Republican vision of saving the rich lost.</p>
<p>Go over the Fiscal Cliff if necessary, show some spine, i.e., principles.</p>im1dc commented on 'Links for 11-23-2012'tag:typepad.com,2003:6a00d83451b33869e2017ee5894df5970d2012-11-23T15:26:53Z2012-11-23T15:26:53Zim1dcDidn't understand a word but wish I had been there to enjoy Live What a happy upbeat performance! Music Video...<p>Didn&#39;t understand a word but wish I had been there to enjoy Live</p>
<p>What a happy upbeat performance!</p>
<p>Music Video - 6:08</p>
<p><a href="http://www.youtube.com/watch?v=RdrwvOI_g0o" rel="nofollow">http://www.youtube.com/watch?v=RdrwvOI_g0o</a></p>
<p>&quot;Herbert Gronemyer - Mensch (Live at Montreux 2012)&quot;</p>Edward Lambert commented on 'Links for 11-23-2012'tag:typepad.com,2003:6a00d83451b33869e2017ee5892bc5970d2012-11-23T15:09:10Z2012-11-23T15:09:10ZEdward LambertThe UT index through the crisis until now... Use this equation to evaluate... UT = u - cu + cu(ls)...<p>The UT index through the crisis until now...</p>
<p>Use this equation to evaluate...</p>
<p>UT = u - cu + cu(ls)</p>
<p>UT = Total unused capacity &quot;available&quot; to the economy in terms of unemployment (labor) and capacity utilization (capital). There is a difference between potential capacity and available (possible) capacity. This equation defines clearly the line between what is potential and what is possible. <br />
u = unemployment<br />
cu = capacity utilization<br />
cu(ls) = 0.925 * ls - 15.5 (ls = labor share of income, 2005=100), availability constraint on cu.</p>
<p>Year-Qtr........ u ..... cu ..... cu(ls) ...... UT</p>
<p>2008-04-01.... 5.2.... 79.2.... 76.9.... 2.9<br />
2008-07-01.... 6.0.... 76.6.... 77.0.... 6.5<br />
2008-10-01.... 6.6.... 73.3.... 78.3.... 11.7<br />
2009-01-01.... 8.8.... 69.2.... 76.7.... 16.3<br />
2009-04-01.... 9.1.... 67.2.... 76.6.... 18.5<br />
2009-07-01.... 9.6.... 68.2.... 75.5.... 16.9<br />
2009-10-01.... 9.5.... 69.5.... 74.2.... 14.2<br />
2010-01-01.... 10.4.... 71.3.... 73.7....12.8<br />
2010-04-01.... 9.5.... 73.3.... 74.0.... 10.2<br />
2010-07-01.... 9.5.... 74.8.... 73.4.... 8.1<br />
2010-10-01.... 9.1.... 75.4.... 72.6.... 6.3<br />
2011-01-01.... 9.5.... 76.2.... 74.6.... 7.9<br />
2011-04-01.... 8.9.... 76.2.... 73.8.... 6.5<br />
2011-07-01.... 9.1.... 77.1.... 72.8.... 4.8<br />
2011-10-01.... 8.3.... 77.9.... 72.1.... 2.5<br />
2012-01-01.... 8.6.... 78.7.... 73.1.... 3.0<br />
2012-04-01.... 8.0.... 78.9.... 73.1.... 2.2<br />
2012-07-01.... 8.1.... 78.5.... 72.5.... 2.1</p>
<p>We can see the high spike in UT (+18.5%), April, 2012. </p>
<p>+18.5% was giving us room to maneuver a recovery.<br />
We can see how the UT index has come down since as the economy has recovered. But now the economy has been in a holding pattern with the UT index staying between 2% and 3%. (The UT index has a Zero Lower Bound at 0%.)<br />
The economy now has little room to improve in terms of employment and capacity utilization. Thus, Bernanke has just said that the economy has little improvement ahead. The UT index shows that we would have known the exact same thing a year ago when the UT index was 2.5. Bernanke could use this UT equation to assess the limits on the economy faster.<br />
The Fed has a responsibility to lower unemployment, but by not paying attention to labor share, which has dropped causing cu(ls) to drop too, the economy now has little room to bring down unemployment (one of the mandates of the Fed by the way). Holding cu = 78.5 and cu(ls) = 72.5, the best unemployment could reach is 6.0%. But having a cu = 78.5% has to be considered unacceptable. The economy may never kick in with inflation with that capacity utilization, cu.</p>
<p>The new labor share of income number comes out Dec 5th. I will have an update of the UT index then.</p>
<p>One note: The equation needs some fine-tunement. The UT index that we are seeing of 2.1 may actually be closer to zero. I am waiting for the reviewers of the equation to have some free time to maybe work on that.</p>
<p>If you want an explanation of the UT equation, here is a link...<br />
<a href="http://economistsview.typepad.com/economistsview/2012/11/thanks.html#comment-6a00d83451b33869e2017ee582fd44970d" rel="nofollow">http://economistsview.typepad.com/economistsview/2012/11/thanks.html#comment-6a00d83451b33869e2017ee582fd44970d</a></p>rjs commented on 'Links for 11-23-2012'tag:typepad.com,2003:6a00d83451b33869e2017c33e49782970b2012-11-23T12:01:44Z2012-12-06T12:25:53Zrjshttp://profile.typepad.com/rjsigmundre: Offsetting private sector financial balances with fiscal policy - seems Wren-Lewis misses the point; sector balances isnt something policy...<p>re: Offsetting private sector financial balances with fiscal policy - <br />
seems Wren-Lewis misses the point; sector balances isnt something policy makers have control over; its an accounting identity...see Stephanie Kelton&#39;s presentation on C-Span:</p>
<p><a href="http://www.c-spanarchives.org/clip/4161813" rel="nofollow">http://www.c-spanarchives.org/clip/4161813</a></p>Fred C. Dobbs commented on 'Links for 11-23-2012'tag:typepad.com,2003:6a00d83451b33869e2017d3e13453a970c2012-11-23T11:51:40Z2012-11-23T11:51:40ZFred C. Dobbs(Yeah, baby! This could work?) Seeking Ways to Raise Taxes but Leave Tax Rate As Is http://nyti.ms/Qz7cSs NYT - November...<p>(Yeah, baby! This could work?)</p>
<p>Seeking Ways to Raise Taxes but <br />
Leave Tax Rate As Is <a href="http://nyti.ms/Qz7cSs" rel="nofollow">http://nyti.ms/Qz7cSs</a><br />
NYT - November 22, 2012 - JONATHAN WEISMAN<br />
<br />
WASHINGTON — Congressional negotiators, trying to avert a fiscal crisis in January, are examining ideas that would allow effective tax rates to rise for the wealthy without technically raising the top tax rate of 35%. They hope the proposals will advance negotiations by allowing both parties to claim they stood their ground. </p>
<p>One possible change would tax the entire salary earned by those making more than a certain level — $400,000 or so — at the top rate of 35% rather than allowing them to pay lower rates before they reach the target, as is the standard formula. That plan would allow Republicans to say they did not back down in their opposition to raising marginal tax rates and Democrats to say they prevailed by increasing effective tax rates on the rich. At the same time, it would provide an initial effort to reduce the deficit, which the negotiators call a down payment, as Congressional tax-writing committees hash out a broad overhaul of the tax code. </p>
<p>That idea could be combined with the reinstatement of tax code provisions that once prevented the rich from taking personal exemptions or itemizing deductions. Those rules were eliminated by the tax cut of 2001. Reinstating them would tack an additional one to two percentage points onto the effective tax rates of high-income households without raising the 35% rate, but which households would be affected has not been decided. In all, tax experts say, families in the top tax bracket would find their effective tax rate jump to 41%, even though the top statutory rate would remain 35%. ...<br />
</p>Fred C. Dobbs commented on 'Links for 11-23-2012'tag:typepad.com,2003:6a00d83451b33869e2017c33e446e7970b2012-11-23T10:59:47Z2012-11-23T10:59:47ZFred C. DobbsSkills Don’t Pay the Bills http://nyti.ms/104OQdi NYT - November 20, 2012 - ADAM DAVIDSON Earlier this month, hoping to understand...<p>Skills Don’t Pay the Bills <a href="http://nyti.ms/104OQdi" rel="nofollow">http://nyti.ms/104OQdi</a><br />
NYT - November 20, 2012 - ADAM DAVIDSON<br />
<br />
Earlier this month, hoping to understand the future of the moribund manufacturing job market, I visited the engineering technology program at Queensborough Community College in New York City. I knew that advanced manufacturing had become reliant on computers, yet the classroom I visited had nothing but computers. As the instructor Joseph Goldenberg explained, today’s skilled factory worker is really a hybrid of an old-school machinist and a computer programmer. Goldenberg’s intro class starts with the basics of how to use cutting tools to shape a raw piece of metal. Then the real work begins: students learn to write the computer code that tells a machine how to do it much faster. </p>
<p>Nearly six million factory jobs, almost a third of the entire manufacturing industry, have disappeared since 2000. And while many of these jobs were lost to competition with low-wage countries, even more vanished because of computer-driven machinery that can do the work of 10, or in some cases, 100 workers. Those jobs are not coming back, but many believe that the industry’s future (and, to some extent, the future of the American economy) lies in training a new generation for highly skilled manufacturing jobs — the ones that require people who know how to run the computer that runs the machine. </p>
<p>This is partly because advanced manufacturing is really complicated. Running these machines requires a basic understanding of metallurgy, physics, chemistry, pneumatics, electrical wiring and computer code. It also requires a worker with the ability to figure out what’s going on when the machine isn’t working properly. And aspiring workers often need to spend a considerable amount of time and money taking classes like Goldenberg’s to even be considered. Every one of Goldenberg’s students, he says, will probably have a job for as long as he or she wants one. </p>
<p>And yet, even as classes like Goldenberg’s are filled to capacity all over America, hundreds of thousands of U.S. factories are starving for skilled workers. Throughout the campaign, President Obama lamented the so-called skills gap and referenced a study claiming that nearly 80 percent of manufacturers have jobs they can’t fill. Mitt Romney made similar claims. The National Association of Manufacturers estimates that there are roughly 600,000 jobs available for whoever has the right set of advanced skills. </p>
<p>Eric Isbister, the C.E.O. of GenMet, a metal-fabricating manufacturer outside Milwaukee, told me that he would hire as many skilled workers as show up at his door. Last year, he received 1,051 applications and found only 25 people who were qualified. He hired all of them, but soon had to fire 15. Part of Isbister’s pickiness, he says, comes from an avoidance of workers with experience in a “union-type job.” Isbister, after all, doesn’t abide by strict work rules and $30-an-hour salaries. At GenMet, the starting pay is $10 an hour. Those with an associate degree can make $15, which can rise to $18 an hour after several years of good performance. From what I understand, a new shift manager at a nearby McDonald’s can earn around $14 an hour. </p>
<p>The secret behind this skills gap is that it’s not a skills gap at all. I spoke to several other factory managers who also confessed that they had a hard time recruiting in-demand workers for $10-an-hour jobs. “It’s hard not to break out laughing,” says Mark Price, a labor economist at the Keystone Research Center, referring to manufacturers complaining about the shortage of skilled workers. “If there’s a skill shortage, there has to be rises in wages,” he says. “It’s basic economics.” After all, according to supply and demand, a shortage of workers with valuable skills should push wages up. Yet according to the Bureau of Labor Statistics, the number of skilled jobs has fallen and so have their wages. ...</p>
<p>(Manufacturing employees residing far away, with <br />
skills, will work for less. Now, if only we could <br />
off-shore those McDonalds jobs...)</p>crf commented on 'Links for 11-23-2012'tag:typepad.com,2003:6a00d83451b33869e2017d3e11f9b3970c2012-11-23T07:32:26Z2012-11-23T07:32:26ZcrfQuit linking to paywalled articles please.<p>Quit linking to paywalled articles please.</p>